Power Up Your DC Plan The DCIIA Auto Features Slide Library
April 2014 © 2014 DCIIA: Dedicated to Enhancing Retirement Security
Introduction DCIIA Auto Features Slide Library This following, albeit lengthy composite, powerpoint slides include: • Research • Talking points • Worksheets
We have designed this library for you to pick and choose the slides or segments that can help you: • Advocate for plan changes • Educate stakeholders • Affirm value of auto features
We have broken this library into modules based on major topics, so feel free to scroll through and explore the research, data and tools available to you. We encourage you to use these slides for your own presentations. *All we ask is that your properly source DCIIA and others who have provided the data to you in the following slides.
If you have questions about the DCIIA Automatic Features Slide Library, of if you would like to suggest changes or additions, please contact us at
[email protected].
2 © 2014 DCIIA: Dedicated to Enhancing Retirement Security
Table of Contents Module 1:
Building a Case for Automatic Features (slide 4)
Module 2:
Trends in Automation (slide 30)
Module 3:
The Participant Experience (slide 44)
Module 4:
The Impact of Automation (slide 52)
Module 5:
Evaluating, Prioritizing & Preparing for Plan Changes (slide 59)
3 © 2014 DCIIA: Dedicated to Enhancing Retirement Security
Module 1:
Building a Case for Using Automatic Features
4 © 2014 DCIIA: Dedicated to Enhancing Retirement Security
DC Plans Can Deliver an Adequate Retirement Through Automation
What the DC Plan Needs to be Successful: • People need to enroll • Participants need to invest in qualified diversified investment alternative • Participants need to save enough What automation can do: • Get people enrolled • Enroll them in a diversified fund • Increase their savings rate 5 © 2014 DCIIA: Dedicated to Enhancing Retirement Security
4 Reasons DC Plans Should Include Auto Features
1. Employees need to save in their DC plans. 2. Employees need to participate in their DC plans. 3. Auto Features promote benefits of diversification and efficient portfolio construction. 4. Auto Features strengthen retirement readiness for employees. 5. Auto Features enhance plan’s nondiscrimination testing.
6 © 2014 DCIIA: Dedicated to Enhancing Retirement Security
1. The Truth About Savings Aon Hewitt Survey:
PSCA :
• 7.3% average before-tax contribution rate increased slightly from the low of 7.2% in 2011.
• Pre-tax deferrals range from average of 5.2 % for lower paid to 6.4% for higher paid.
• 6.0% average Roth contribution, was down from 6.4% in 2011.
• After tax deferrals ranges from 3.7% to 4.9%. • 401(m) deferrals range from 2.5%to 2.8%.
• 72.5% of participants saved at or above the company’s match threshold up from 71.3% in 2011. Aon Hewitt’s 2013 Hot Topics in Retirement (based on all eligible employees, PSCA 55th Annual Survey 2012
© 2014 DCIIA: Dedicated to Enhancing Retirement Security
7
Confidence Low… Confidence in A
2007
2014
Very
27%
28%
Somewhat
43%
38%
Not too or not at all
29%
49%
69% decline!
Source: 2013 EBRI Retirement Confidence Survey
8 © 2014 DCIIA: Dedicated to Enhancing Retirement Security
Are Employees Confident? Confidence level
2013
2014
Very
13%
18%
Somewhat
38%
37%
Not too or not at all
49%
24%
Source: 2013 & 2014 EBRI Retirement Confidence Survey
9 © 2014 DCIIA: Dedicated to Enhancing Retirement Security
Are Workers Prepared? • Americans with
